varied forms of public sector involvement in broadband: australia and new zealand - fernando...

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Varied forms of public sector involvement in broadband: Australia and New Zealand

Fernando Beltrán

University of Auckland

DigiWorld Summit 2013Montpellier, France

November 19-21, 2013

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Trends showing in some parts of the world (Given, 2010):

“Shared conviction about the anticipated size of fast broadband’s economic and social benefits”

(Reynolds, 2009):

• “Broadband networks are increasingly recognised as fundamental for economic and social development.”

• “They serve as communication and transaction platforms for the entire economy and can improve productivity across all sectors.”

• “Advanced communication networks are a key component of innovative ecosystems and support economic growth.”

Why Next Generation Access networks?

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(Given, 2010):

• Australia and New Zealand were perceived to be lagging. Both were well behind the OECD average for total broadband penetration in early 2000s.

• Incumbents not investing in fibre access networks.

• “The big ones were not consistently aggressive enough; the aggressive ones were not big enough”

• Shift away from the liberalization and privatization policy consensus that dominated the last two decades.

Question: Will a wholesale-only fixed access network operation maximize those benefits?

Why government participation?

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Australia’s National Broadband Network (NBN)

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National Broadband Network NBN(before September 2013 election)

March 2009 Australian Labor government announces plans to invest A$ 40 billion in NBN. Creates NBN Co.

2011 Costs are revised to A$ 37 billion

Sept 2012 Special Access Undertaking SAU framework delivered to ACCCA$11 billion deal with Telstra; A$800M Optus deal

93%

7%

FTTP

other

FTTH – 100Mbps symmetrical

Fixed wireless (LTE/4G) - 12/1 MbpsSatellite - 12/1 Mbps

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Fibre Serving Areas

Source: NBN Co

Fibre serving area

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Fibre Serving Areas + Wireless

Source: NBN Co

Fibre serving area

Wireless coverage

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Fibre Serving Areas + Wireless + Satellite

Source: NBN Co

Fibre serving area

Wireless coverage

Satellite Earth station

Satellite beam

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National Broadband Network NBN(after September 2013 election)

93%

7%

FTTP

other

Sept 2013Coalition announces NBN will be a FTTN networkCoalition commissions three review studies on NBNCost is revised down to A$ 22 billion

ACCC awaits government decisions on NBNTerms of Telstra deal (but not the amount) most likely to be renegotiated

Nov 2013

22%

71%

7%

FTTPFTTNother

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New Zealand’s dual approach:

Ultra-Fast Broadband Network (UFB)

and Rural Broadband Initiative (RBI)

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Ultra-Fast Broadband (UFB) and Rural Broadband Initiative (RBI)

2008 Election led National Party to government

2009 NZ Government pledged $1.5 billion investment in a nation-wide broadband infrastructure, which will bring broadband to all Kiwis

• UFB Ultra-Fast Broadband 75% of HH• RBI Rural Broadband Initiative 25% of HH

First six years on priority broadband users • businesses• schools • health services • plus green field developments and

certain tranches of residential areas

2011 Tender procedure for a Public Private Partnership GPON deployment won by four companies:

• 3 Local Fibre Companies• Chorus (former incumbent, demerged)

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New Zealand’s Ultra-Fast Broadband Network UFB

Source: CFH

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LFC Broadband

network

LFC Broadband

network

LFC Broadband

network

LFC Broadband

network

LFC Broadband

network

LFC Broadband

network

NGN service platform and markets

LFC Broadband

network

LFC Broadband

network

RSPRSP RSP

Content and

Service 1

Content and

Service n

Access market

Content market

End users

Competingaccess

provider

Content provider

Marlies van der Wee

I have reworked this fugure a bit, so that it would easier refer to the next slide...Feel fre of course to keep your orginal slide if you think this is better...

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UFB Operating Structure

Source: CFH

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UFB Financial Structure

Source: CFH

Marlies van der Wee

In the paper by Howel, I found a clear explanation about the capital recycling model:"The government funds would be placed in a new Crown-owned „UFB Company” to underwrite the deployment of „Layer 1‟ infrastructure past premises in an initial mutually-agreed area. The private UFB party would fund the „drop‟ from the kerb to the premise when the customer wished to commence purchasing services on the FTTH network. At this point, the private partner would buy a share in the UFB company from the Crown and the relevant funds would be used to extend the network past further premises (the so-called „capital recycling model‟)16. The UFB company would make the infrastructure available to either its own or competing „Layer 2‟ operators on non-discriminatory terms (Heatley & Howell, 2010).The so-called „capital recycling model‟ was claimed to shield the private partner from financial risks associated with uptake uncertainty until such time as an end consumer was willing to start purchasing services on the new infrastructure"

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New Zealand and Australia (before Australian 2013 election)

Australia New Zealand

How are they doing?

How much does it cost?

How is it structured?

What are the regulations?

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How are they doing?

Deployment Target

By 2020 12.2 million fibre premises passed, 1 million fixed wireless and satellite premises covered; 8.5 million fibre premises connected (NBN Co 2012a).

By 2019 1,350,000 fibre premises passed; By 2015 252,000 rural households covered (MBIE 2012)




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How are they doing?

Deployment Target




• Funding

• Capital expenditure

• $ per person

Government funded

A $ 37.4 billion [€ 49,1 billion*]

A $1,669 [€ 1,270]

Government invests half of the total and private partners afford the restNZ $ 1.5 billion [€ 0.95 billion*]

NZ $ 341 [€ 215]



Marlies van der Wee

This is very low, even compared to European standards!!Is this only the government part (so the fibre passing) and not the drop section (whihc is supposed to be funded by the LFC?)

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How are they doing?

Deployment Target




• Funding


• $ per person

Government funded


A $1,669 [€ 1,270]


NZ $ 341 [€ 215]


• Leading agency

• Private participation

National Broadband Network Company, NBN Co.NBN Co is wholly owned by the Australian government; private participation is through procurement contracts for fibre build-up.Regional Backbone Blackspots Program, RBBP.

Crown Fibre Holdings, CFH. Four partnerships with private parties (Chorus, Enable Networks, North Power Fibre, UltraFast Fibre)Rural Broadband Initiative, RBI.


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How are they doing?

Deployment Target




• Funding


• $ per person

Government funded


A $1,669 [€ 1,270]

Government invests half of the total and private partners afford the restNZ $ 1.5 billion [€0.95 billion*]

NZ $ 341 [€ 215]


• Leading agency


National Broadband Network Company, NBN Co.NBN Co is wholly owned by the Australian government; private participation is through procurement contracts for fibre build-up.Regional Backbone Blackspots Program, RBBP.



• Regulatory commitments

• Copper infrastructure

Self-regulatory guidelines and commitments consigned in the Special Access Undertakings under review by ACCCTotal decommission of Telstra’s last mile copper infrastructure as dictated by the NBN Co-Telstra agreement

Commerce Commission monitors the buildup process

Commerce Commission rules in favour of access seekers by reducing the price of UCLL.

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New Zealand and Australia (post Australian 2013 election)


How are they doing?

Deployment Target

???



• Funding


• $ per person

Government funded

A$ 22 billion


NZ $ 341 [€ 215]


• Leading agency


National Broadband Network Company, NBN Co.



• Regulatory commitments

• Copper infrastructure

Self-regulatory guidelines and commitments consigned in the Special Access Undertakings under review by ACCCTelstra agreement under discussion

Commerce Commission monitors the buildup process

Commerce Commission rules in favour of access seekers by reducing the price of UCLL.

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23

mercithank you

tēnā koutougracias

[email protected]

TPRC 2011

mailto:[email protected]

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References

Given, J. (2010) Take your partners: Public private interplay in Australian and New Zealand plans for next generation broadband. Telecommunications Policy, Volume 34, Issue 9, October 2010, Pages 540-549

Reynolds, T.(2009). The role of communications infrastructure investment in economic recovery. DSTI/ICCP/CISP(2009). Paris: OECD

NBN Co. (2012). NBN Corporate Plan 2012-2015

CFH (2010). Ultra Fast Broadband in Business - Seizing the Opportunity

Beltrán, F. (2013) Effectiveness and efficiency in the build-up of high-speed broadband platforms in Australia and New Zealand. Communications and Strategies.

Beltrán, F. (2013) Fibre-to-the-home, high-speed and national broadband plans: Tales from Down Under. Telecommunications Policy.

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